Non-owner Car Insurance

What Is Non-owner Car Insurance?

It seems like a no-brainer: If you don’t own a car, you don’t need car insurance, right? Not so fast. There are plenty of people who don’t have their own ride but drive. A lot. If that sounds like you, well, then, yes, some car insurance is a good idea. But you don’t need to pay for robust coverage. Enter non-owner car insurance, a special policy tailored to … wait for it … non-owners. Non-owner car insurance covers liability — meaning any injuries or property damage you cause — while you’re renting or borrowing a car.

How Does Non-owner Car Insurance Work?

There are four major types of car insurance — five, if you include gap insurance. Non-owner car insurance essentially covers the Big Kahuna: liability insurance. Liability insurance covers bodily injury (BI) or property damage (PD) that other people incur from an accident you caused.

Sometimes, you can add these coverages to a non-owner car insurance policy:

Personal Injury Protection (PIP): Covers medical expenses and lost wages you incur as the result of an accident you caused.

Uninsured/underinsured motorist coverage: Covers any medical expenses or property damage you incur as the result of an accident someone with little-to-no insurance caused.

What Non-owner Car insurance Doesn’t Cover

You won’t get what’s sometimes referred to as the optional car insurance coverages:

Collision: Covers damage done to your vehicle in an accident you caused.

Comprehensive: Covers damage done by anything else. So, say, your car gets stolen or a tree falls on top of it on or off the road.

Side note: If all of these types of car insurance are wrinkling your brain, check out our explainer on how car insurance works.

There are other limits to non-owner car insurance. For instance, it only covers you; you can’t put an additional driver on your policy. (Let them get their own non-owner car insurance, you know?) And, remember, this is just liability coverage we’re talking about, so towing and rental costs won’t be covered if you’re in an accident.

How Much Is Non-owner Car Insurance?

The cost of car insurance is based on a laundry list of things. For starters, it’ll vary by state, since each one sets its own coverage requirements — you can go here to find out how much auto insurance coverage is required in your state. But rates are also affected by zip code, age, gender, marital status, how many miles you drive, your credit score, and, of course, driving record, among other things. That’s our long-winded way of saying it’s hard to attach a concrete number to the price of non-owner car insurance. But here’s what we can tell you: It’ll cost less than a standard car insurance policy, which costs, on average, about $900 a year.

Who Needs Non-owner Car Insurance?

You should consider a non-owner car insurance policy if you fall into one of following buckets:

You got a DUI. In this case, you might need to buy non-owner car insurance. That’s because many states require someone convicted of a DUI or other serious violation fill out an SR-22 form to get a driver’s license issued or reinstated. And an SR-22 is essentially a certificate of car insurance. So, if you don’t own a vehicle, a non-owner policy is in order.

You drive someone else’s car. A lot. There’s actually all sorts of reasons for driving a car you don’t own. Maybe you’re a caregiver. Maybe you don’t live with mom or dad, but still borrow their car frequently. Whatever the case, while the owner’s car insurance will kick in if you cause an accident, a non-owner’s policy would cover any expenses exceeding their coverage limits — and provide crucial supplemental protection.

You rent cars. A lot. Yes, you can buy insurance from the rental company at checkout, but that coverage is generally expensive and often inadequate. So, if you’re borrowing cars on a regular basis, a non-owner’s policy is probably more cost-effective. One big note here, though: Non-owner’s car insurance, as you may recall, doesn’t include collision or comprehensive coverage, so you still might want to buy a collision damage waiver from the rental company. You can go here to learn more about rental car insurance.

You car-share. You’ll generally get some liability coverage from car-sharing companies like Zipcar, Car2Go or Maven, but you might want more protection than that policy will provide. Note: Car-sharing is different than ridesharing, but the same rule (sort of) applies. While rideshare companies provide drivers with coverage while you’ve got a passenger on board, you’ll generally need extra protection when you don’t. You can learn more about rideshare insurance here.

You’re between cars right now. Lapses in car insurance can lead to higher premiums later on (the insurer might consider this “risky”). So, if you don’t happen to have a ride, but plan to get one in the future, a non-owner car insurance policy could help you avoid costly coverage down the road.

Who Doesn’t Need Non-owner Car Insurance?

Anyone who doesn’t fall into those buckets! Just kidding … sort of. If you drive or rent cars infrequently or, you know, not at all, non-owner car insurance is probably an unnecessary expense. And, if you are formally covered by the owner’s car insurance, it’s also uncalled for. For instance, a lot of parents or spouses list their family members as secondary drivers.

Now, while this may go without saying, if you actually own a car, you shouldn’t think of non-owner car insurance as an option. Moreover, if you’re borrowing a car on a more permanent basis — say, a friend has to temporarily relocate for work and leaves their car with you — you might want to at least temporarily spring for more comprehensive coverage. We can help you compare car insurance quotes across several providers. And you can learn more about insuring a vehicle you don’t own here.

Beyond that, you need to not own a car. That sounds pretty straightforward, but check with a prospective insurer about what they consider a non-owned vehicle and what constitutes regular use. Some insurers, for instance, won’t extend a non-owner car insurance policy to someone who lives with an actual car owner.

Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.